Family Dollar to Close 1,000 Stores

The discount chain continues to struggle due to inflation.

March 13, 2024

Discount retailer Family Dollar announced that it will close 1,000 stores, reported CNN. The company will close 600 locations in the first half of 2024 and 370 stores over the next several years as store leases expire.

Dollar Tree, which owns Family Dollar, said it would close an additional 30 stores this year as leases expire.

The discount chain, which caters to low-income customers in predominantly urban areas, has been struggling as inflation has risen. “The dollar and discount segments of retail have become more competitive in recent years due to the shrinking middle class, inflation and retail store closures,” wrote CNN.

Things looked brighter last year as dollar stores saw a bump in sales as inflation hit grocery prices, with one in five consumers buying food at dollar stores in 2023, reported NACS Daily. Even as inflation began to ease over the summer, wealthy consumers continued to shop at dollar stores—households making $100,000 or more were 15% more likely to frequent dollar stores than they were the year before, with dollar store shoppers rising from 39% to 45% of this group as of June 2023.

Dollar Tree bought Family Dollar in 2015 for $8.5 billion, and hoped that “by joining forces, it could grow its customer base, reduce costs and fend off bigger retailers like Dollar General and Walmart. But Dollar Tree has struggled to integrate Family Dollar.”

The stores were already in poor condition at the time of acquisition, said CNN, and even after renovating thousands of stores, many stores were poorly maintained and had trouble recovering.